Governance has become an issue of global importance. An important theme of corporate governance deals with issues of accountability and fiduciary duty, essentially advocating the implementation of policies and mechanisms to ensure good behaviour and protect shareholders. Well-defined and enforced governance provides a structure that, at least in theory, works for the benefit of everyone concerned by ensuring that society adheres to accepted ethical standards and best practices as well as to formal laws. Laws and regulations alone will not improve governance practices. You cannot legislate ethics. Good governance is about effective, ethical leadership based on the universal governance principles of transparency, fairness, responsibility and accountability.
Governance is more about human behaviour than about structures, regulations and rules. It is essentially about responsible leadership of companies. Issues of bias in human cognition and perception, decision making under uncertainty, risk assessment, and the impact of emotion and affect on behaviour, receives less attention in governance. The principles of transparency, fairness, responsibility and accountability are analysed in isolation to actors (human beings) who have to monitor and implement these principles. The governance failures ranging from Enron, WorldCom and culprits in the recent financial crisis is evidence highlighting that assumptions of impartiality and the absence of bias because there are structures, regulations and rules in place, are overly optimistic. Financial incentives can be a serious potential source of bias.
Governance is not static, but evolutionary. Governance is typically thought to be the exclusive domain of directors. That should not be the case. For good governance to exist in both theory and practice, everybody must be empowered to participate in meaningful ways in decision-making processes.
Seminar: Ethics, Sex and Power
“Whatever we learn to do, we learn by actually doing it. By doing just acts we come to be just; by doing self-controlled acts, we come to be self-controlled; and by doing brave acts, we become brave”Aristotle